Greek PM Alexis Tsipras 'confident' of bailout deal

Greek Finance Minister Yanis Varoufakis was sidelined from his prominent role in bailout negotiationsReuters

Greek bond yields plunged on Tuesday amid growing confidence that Athens would soon reach a deal with its creditors over a long-awaited bailout extension.

Greek Prime Minister Alexis Tsipras told a Greek television channel he was confident he would reach an early deal with international creditors, possibly as soon as the end of next week.

"Our goal... is to reach a first agreement this week if possible, or next week at the latest... I believe we are close," Tsipras told Star TV in an interview broadcast late on Monday.

The yield on Greek bonds fell to 21.08% on Tuesday and Greece's AGT stock index was up 0.64% in early trading, as markets perceived a favourable shift in the prospects of an end to Greek uncertainty within a couple of weeks.

In his first major television interview since he was elected in January, Tsipras said he believed an initial deal was close and ruled out an early election in Greece. Tsipras also raised the prospect of holding a referendum if creditors demanded reforms that his government deemed unacceptable.

The Greek PM on Monday relegated his controversial finance minister Yanis Varoufakis from his prominent role in the Greek team negotiating over the country's bailout package.

Varoufakis had riled his fellow eurozone ministers with his abrasive style and has now been side-lined as Greece pushes for a final deal with creditors. Greece's deputy foreign minister Euclid Tsakalotos was chosen to head a new group that is handling Greece's negotiations.

Tsipras defended Varoufakis but admitted that the mood between Greece and its creditors was uneasy.

"There is a negative climate but I believe that this part of the negotiating game," Tsipras said.

"Part of the negotiating game is to de-construct the person who sits opposite you at the negotiation table."